diff --git a/src/config-field-definitions.ts b/src/config-field-definitions.ts
index 77efa9bf..8c265a4e 100644
--- a/src/config-field-definitions.ts
+++ b/src/config-field-definitions.ts
@@ -20,7 +20,7 @@ export const CONFIG_FIELD_DEFINITIONS = {
   },
   defaultShell: {
     label: 'Default Shell',
-    description: 'This is the shell used for new command sessions (for example /bin/bash or /bin/zsh). Only change this if you know your environment requires a specific shell.',
+    description: 'This is the shell used for new command sessions (for example /bin/bash or /bin/zsh). You can include arguments, for example "pwsh.exe -NoProfile -NoLogo". Only change this if you know your environment requires a specific shell.',
     valueType: 'string',
   },
   telemetryEnabled: {
diff --git a/src/terminal-manager.ts b/src/terminal-manager.ts
index 00d431a7..3b63f214 100644
--- a/src/terminal-manager.ts
+++ b/src/terminal-manager.ts
@@ -82,65 +82,89 @@ interface ShellSpawnConfig {
   windowsVerbatim?: boolean;
 }
 
+/**
+ * Split a shell configuration value into its executable and any extra arguments.
+ *
+ * defaultShell (and the per-call shell parameter) may carry flags, e.g.
+ * "pwsh.exe -NoProfile -NoLogo" or "/bin/bash --norc". Without this split the
+ * whole string is treated as one executable path, spawn fails with ENOENT and
+ * the call hangs until the client's timeout. Quotes are honoured so executable
+ * paths containing spaces survive, e.g. '"C:\\Program Files\\PowerShell\\7\\pwsh.exe" -NoProfile'.
+ * See issue #448.
+ */
+function splitShellConfig(shell: string): { executable: string; args: string[] } {
+  const tokens: string[] = [];
+  const pattern = /"([^"]*)"|'([^']*)'|(\S+)/g;
+  let match: RegExpExecArray | null;
+  while ((match = pattern.exec(shell)) !== null) {
+    tokens.push(match[1] ?? match[2] ?? match[3]);
+  }
+  const [executable = shell, ...args] = tokens;
+  return { executable, args };
+}
+
 /**
  * Get the appropriate spawn configuration for a given shell
  * This handles login shell flags for different shell types
  */
-function getShellSpawnArgs(shellPath: string, command: string): ShellSpawnConfig {
-  const shellName = path.basename(shellPath).toLowerCase();
-  
+export function getShellSpawnArgs(shellPath: string, command: string): ShellSpawnConfig {
+  // The shell value may include arguments (e.g. "pwsh.exe -NoProfile"); match on
+  // the executable name only and keep the caller's extra args ahead of our flags.
+  const { executable: shellExecutable, args: shellArgs } = splitShellConfig(shellPath);
+  const shellName = path.basename(shellExecutable).toLowerCase();
+
   // Unix shells with login flag support
   if (shellName.includes('bash') || shellName.includes('zsh')) {
-    return { 
-      executable: shellPath, 
-      args: ['-l', '-c', command],
-      useShellOption: false 
+    return {
+      executable: shellExecutable,
+      args: [...shellArgs, '-l', '-c', command],
+      useShellOption: false
     };
   }
-  
+
   // PowerShell Core (cross-platform, supports -Login)
   if (shellName === 'pwsh' || shellName === 'pwsh.exe') {
-    return { 
-      executable: shellPath, 
-      args: ['-Login', '-Command', command],
-      useShellOption: false 
+    return {
+      executable: shellExecutable,
+      args: [...shellArgs, '-Login', '-Command', command],
+      useShellOption: false
     };
   }
-  
+
   // Windows PowerShell 5.1 (no login flag support)
   if (shellName === 'powershell' || shellName === 'powershell.exe') {
-    return { 
-      executable: shellPath, 
-      args: ['-Command', command],
-      useShellOption: false 
+    return {
+      executable: shellExecutable,
+      args: [...shellArgs, '-Command', command],
+      useShellOption: false
     };
   }
-  
+
   // CMD
   if (shellName === 'cmd' || shellName === 'cmd.exe') {
-    return { 
-      executable: shellPath, 
-      args: ['/c', command],
+    return {
+      executable: shellExecutable,
+      args: [...shellArgs, '/c', command],
       windowsVerbatim: true,
-      useShellOption: false 
+      useShellOption: false
     };
   }
-  
+
   // Fish shell (uses -l for login, -c for command)
   if (shellName.includes('fish')) {
-    return { 
-      executable: shellPath, 
-      args: ['-l', '-c', command],
-      useShellOption: false 
+    return {
+      executable: shellExecutable,
+      args: [...shellArgs, '-l', '-c', command],
+      useShellOption: false
     };
   }
-  
+
   // Unknown/other shells - use shell option for safety
   // This provides a fallback for shells we don't explicitly handle
-  return { 
+  return {
     executable: command,
     args: [],
-    useShellOption: shellPath 
+    useShellOption: shellExecutable
   };
 }
 
diff --git a/test/test-default-shell-args.js b/test/test-default-shell-args.js
new file mode 100644
index 00000000..71df4545
--- /dev/null
+++ b/test/test-default-shell-args.js
@@ -0,0 +1,69 @@
+/**
+ * Tests for defaultShell / shell values that carry arguments (issue #448).
+ *
+ * A defaultShell like "pwsh.exe -NoProfile -NoLogo" or "/bin/bash --norc" used to
+ * be treated as a single executable path, so spawn failed with ENOENT and the
+ * call hung until the client timed out. getShellSpawnArgs now splits the
+ * executable from its arguments, matches the shell on the executable name and
+ * keeps the caller's extra args ahead of the standard flags. Single-token values
+ * must stay byte-for-byte identical to the old behaviour.
+ *
+ * These assertions are platform independent (shell matching for cmd/pwsh keys and
+ * the POSIX paths used here resolve the same on any OS), so they run on macOS CI.
+ */
+import { getShellSpawnArgs } from '../dist/terminal-manager.js';
+import assert from 'assert';
+
+function runDefaultShellArgsTests() {
+  // 1. Single-token values are unchanged (no regression)
+  let cfg = getShellSpawnArgs('/bin/bash', 'echo hi');
+  assert.strictEqual(cfg.executable, '/bin/bash');
+  assert.deepStrictEqual(cfg.args, ['-l', '-c', 'echo hi']);
+  console.log('✓ single-token /bin/bash unchanged');
+
+  cfg = getShellSpawnArgs('pwsh.exe', 'x');
+  assert.strictEqual(cfg.executable, 'pwsh.exe');
+  assert.deepStrictEqual(cfg.args, ['-Login', '-Command', 'x']);
+  console.log('✓ single-token pwsh.exe unchanged');
+
+  // 2. The reported case: pwsh with flags no longer collapses into the executable
+  cfg = getShellSpawnArgs('pwsh.exe -NoProfile -NoLogo', 'Write-Host hi');
+  assert.strictEqual(cfg.executable, 'pwsh.exe');
+  assert.deepStrictEqual(cfg.args, ['-NoProfile', '-NoLogo', '-Login', '-Command', 'Write-Host hi']);
+  console.log('✓ pwsh.exe with flags splits correctly');
+
+  // 3. Unix shell with a flag
+  cfg = getShellSpawnArgs('/bin/bash --norc', 'echo hi');
+  assert.strictEqual(cfg.executable, '/bin/bash');
+  assert.deepStrictEqual(cfg.args, ['--norc', '-l', '-c', 'echo hi']);
+  console.log('✓ /bin/bash --norc splits correctly');
+
+  // 4. Quoted executable path with spaces survives
+  cfg = getShellSpawnArgs('"/opt/my shell/bin/bash" --norc', 'echo hi');
+  assert.strictEqual(cfg.executable, '/opt/my shell/bin/bash');
+  assert.deepStrictEqual(cfg.args, ['--norc', '-l', '-c', 'echo hi']);
+  console.log('✓ quoted executable path with spaces preserved');
+
+  // 5. cmd with a flag keeps windowsVerbatim
+  cfg = getShellSpawnArgs('cmd.exe /q', 'dir');
+  assert.strictEqual(cfg.executable, 'cmd.exe');
+  assert.deepStrictEqual(cfg.args, ['/q', '/c', 'dir']);
+  assert.strictEqual(cfg.windowsVerbatim, true);
+  console.log('✓ cmd.exe /q splits correctly and stays verbatim');
+
+  console.log('\n✅ All defaultShell argument-parsing tests passed');
+}
+
+export default async function runTests() {
+  try {
+    runDefaultShellArgsTests();
+    return true;
+  } catch (error) {
+    console.error('❌ Test failed:', error.message);
+    return false;
+  }
+}
+
+if (import.meta.url === `file://${process.argv[1]}`) {
+  runDefaultShellArgsTests();
+}